Readers may be interested in knowing that a bill has been submitted to our legislature that would provide positive cash flow for New Mexico by closing a tax loophole that allows out-of-state and multi-unit companies to avoid paying their share of New Mexico taxes. The loophole would be closed by requiring ‘combined reporting’ when these corporations file their tax returns.
This legislation, SB90, would also create a more nearly level playing field for New Mexico companies, and it would lower taxes from 7.9 percent to 7 percent for all corporations with more than a million dollars in revenue. (Smaller corporations would continue to pay a 4.9 percent tax rate.)
Is there any possible disadvantage to SB90? Lobbyists opposed to it claim that the affected companies would close their New Mexico operations if this bill would pass. How do they explain that this did not happen in the states surrounding New Mexico after passage of similar ‘combined reporting’ legislation? Since 2004 New Mexico has been the only Western state that does not require combined reporting for out-of-state and multi-unit companies!
More details on this proposed legislation are available at the website (nmlegis.gov) .
Simply search for “combined-reporting.”